Capital A to benefit from tightened economy: CEO Tony Fernandes

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Tony Fernandes, chief executive officer of Capital A.

Chris Ratcliffe | Bloomberg | Getty Images

Despite soaring oil prices and weakening currencies, the outlook for aviation remains positive due to “extremely strong” demand, said Tony Fernandes, CEO of AirAsia parent company Capital A.

“We’re looking to add 20 more aircraft to the fleet for the first time in a long, long time even before Covid,” he told CNBC’s “Squawk Box Asia” on Friday. 

What would be a “problem,” however, is getting the aviation group’s fleet back out of maintenance, Fernandes added.

“In AirAsia we have 205 aircrafts and in AirAsia X we have about 20 aircrafts … getting slots and obviously getting them ready for service has been a big challenge.” 

The positive outlook comes in spite of negative market reactions to Fernandes’ resignation as AirAsia X’s Group CEO this week. AirAsia X is the long-haul budget flight arm of AirAsia. 

AirAsia X shares dropped after the Oct. 31 announcement, and losses since the development still stood at about 5% as of Friday morning.

“Unfortunately, whatever I do gets blown out of proportion. I went in there [AirAsia X] for a short period … I just went in there to kickstart an airline that would have been heavily restructured and was in hibernation,” Fernandes said. 

Unlocking ‘real value’ of Capital A 

Fernandes told CNBC that he is now focusing on the larger Capital A group and “unlocking its real value.”

He added that there will be a newly formed holding company “very soon,” which would contain all aviation services, including its engineering company Asia Digital Engineering, restaurant brand Santan and its consulting arm. 

“My job now is to make sure we deliver profitability, good cash flow growth, have the right funding on all of these and from where we were … the sky looks really good,” Fernandes said. 

E-commerce provides ‘huge opportunity’ 

How the pandemic shifted how Boeing and airlines think about air cargo

In addition, the pandemic has provided a huge opportunity with the boom in e-commerce, which Fernandes said is here to stay.

“Even in logistics, it’s a wonderful time for us to grow. For the first time in our history, we’ve taken three cargo planes.” 

He added: “It still takes a long time to ship products even from Kuala Lumpur to Singapore. [At] AirAsia, we do it in a day now. And so we will do point-to-point logistics, change the whole model, and we see a huge opportunity for us.”

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